Wow
Showing posts with label banks. Show all posts
Showing posts with label banks. Show all posts
Wednesday, October 5, 2011
Just a Data Dump
Now this graph is illuminating. And a bit scary. It tells us the stages by which the remaining ivestment banks became 2 Big 2 Fail.
Wow
Wow
Tuesday, June 22, 2010
Three brief items
1. Deal Struck at Landry's
Landry's Restaurants Inc., a seafood chain operation, says that Pershing Square Capital Management has agreed to drop its resistance to the buyout of tghe company by its chief executive, Tilman Fertitta.
In order to obtain this agreement, as you mnight expect, Feritta had to sweeten his offer for the 45 percent of the shares of Landry's (LNY.N) that he doesn't already own, up from $24 a share to $24.50 a share. The bidding was at $14.75 a share back in November.
Pershing Square and related entitied own together a little less that 10 perecent of the outstanding shares.
2. Incumbents win at First Franklin
Two incumbent board members at First Franklin Corp., of Cincinnati, Ohio, the holding company for Franklin Savings and Loan Co., have held on to their seats despite a challenge from Lenox Wealth Management Inc.
Also, a nonbinding referendum on the declassification of the board failed to muster the necessary majority.
This fight illustrated one common feature of proxy fights that I believe I have so far left largely undiscussed on this blog: the disputes over what constitutes the relevant peer group. One commonly hears dissidents challenge a management on the theory that it has failed to keep pace with the performance of similarly placed corporations, the peer group. One often hears management deny that assertion -- by defining itself against another peer group.
In this case, Glass Lewis used a small list of other banks as a peer group and came to the conclusion that First Franklin is even with the pack. RiskMetrics used a larger group and said First Franklin is lagging behind.
3. Chesapeake Energy: Say on Pay
A vote at the June 11 annual meeting of the shareholders oif Chesapeake Energy ended with 55.6 percebt approval of a resolution that would provide for regular shareholder advisory votes on executive pay.
Chesapeake, an oil company that, despite a name that smacks of the Atlantic Ovcean, is actually based in Oklahoma City, Oklahoma.
The board of directors' argument against say-on-pay had been the rather lame contention that the company and its shareholders should wait and see what Congress will come up with this year. Or, to quote:
Because the Board is unable to predict whether federal legislation will be enacted or the form it might take, the Board believes that it would be premature for the Company to implement an advisory shareholder vote on executive compensation prior to knowing the ultimate disclosure requirements of the Stability Act or any other federal legislation pertaining to say-on-pay.
I'm not surprised that an argument like THAT failed to carry the day!
Landry's Restaurants Inc., a seafood chain operation, says that Pershing Square Capital Management has agreed to drop its resistance to the buyout of tghe company by its chief executive, Tilman Fertitta.
In order to obtain this agreement, as you mnight expect, Feritta had to sweeten his offer for the 45 percent of the shares of Landry's (LNY.N) that he doesn't already own, up from $24 a share to $24.50 a share. The bidding was at $14.75 a share back in November.
Pershing Square and related entitied own together a little less that 10 perecent of the outstanding shares.
2. Incumbents win at First Franklin
Two incumbent board members at First Franklin Corp., of Cincinnati, Ohio, the holding company for Franklin Savings and Loan Co., have held on to their seats despite a challenge from Lenox Wealth Management Inc.
Also, a nonbinding referendum on the declassification of the board failed to muster the necessary majority.
This fight illustrated one common feature of proxy fights that I believe I have so far left largely undiscussed on this blog: the disputes over what constitutes the relevant peer group. One commonly hears dissidents challenge a management on the theory that it has failed to keep pace with the performance of similarly placed corporations, the peer group. One often hears management deny that assertion -- by defining itself against another peer group.
In this case, Glass Lewis used a small list of other banks as a peer group and came to the conclusion that First Franklin is even with the pack. RiskMetrics used a larger group and said First Franklin is lagging behind.
3. Chesapeake Energy: Say on Pay
A vote at the June 11 annual meeting of the shareholders oif Chesapeake Energy ended with 55.6 percebt approval of a resolution that would provide for regular shareholder advisory votes on executive pay.
Chesapeake, an oil company that, despite a name that smacks of the Atlantic Ovcean, is actually based in Oklahoma City, Oklahoma.
The board of directors' argument against say-on-pay had been the rather lame contention that the company and its shareholders should wait and see what Congress will come up with this year. Or, to quote:
Because the Board is unable to predict whether federal legislation will be enacted or the form it might take, the Board believes that it would be premature for the Company to implement an advisory shareholder vote on executive compensation prior to knowing the ultimate disclosure requirements of the Stability Act or any other federal legislation pertaining to say-on-pay.
I'm not surprised that an argument like THAT failed to carry the day!
Monday, December 7, 2009
UK's trade minister
The United Kingdom's trade minister, Lord Davies, has flown to Saudi Arabia with the intent of persuading two defaulting Saudi conglomerates, the Saad Group and Ahmad Hamad Algosaibi & Bros (AHAB) to stop giving preference to local banks over British banks in terms of the restructuring of their loans.
Earlier this year, as it happens, Lord Davies faced a good deal of pressure to resign his office over a now-forgotten scandal that involved his supposed excessive coziness with the Mugabe regime in Zimbabwe. That appears to be all settled, or perhaps just forgotten, now.
Here's a link from that forgotten era of February 2009.
Such things forgotten, Davies is now expected to head off unsatisfactory results in the Gulf. Results so unsatisfactory, in fact, that the Times of London says this morning that the two defaulting Saudi firms could "do as much damage to the Gulf's bruised financial reputation as the Dubai shock of ten days ago."
The two conglomerates involved are not in a position to present a united front, so if Davies is clever he may be able to make use of the tensions between them. Specifically, AHAB has accused the chairman of Saad of a fraud that could amount to $10 billion.
Earlier this year, as it happens, Lord Davies faced a good deal of pressure to resign his office over a now-forgotten scandal that involved his supposed excessive coziness with the Mugabe regime in Zimbabwe. That appears to be all settled, or perhaps just forgotten, now.
Here's a link from that forgotten era of February 2009.
Such things forgotten, Davies is now expected to head off unsatisfactory results in the Gulf. Results so unsatisfactory, in fact, that the Times of London says this morning that the two defaulting Saudi firms could "do as much damage to the Gulf's bruised financial reputation as the Dubai shock of ten days ago."
The two conglomerates involved are not in a position to present a united front, so if Davies is clever he may be able to make use of the tensions between them. Specifically, AHAB has accused the chairman of Saad of a fraud that could amount to $10 billion.
Monday, March 23, 2009
Geithner Banks
Front page headline of today's Wall Street Journal, "Geithner Banks on Private Cash."
When I first read that, I saw the word "banks" as a noun, and Geithner as an adjective. I tried to makle sense out of that: what kind of bank is a Geithner bank, anyway?
It took me a few seconds to mentally transform "banks" into a verb and read the headline as a sentence in which the Treasury Secretary's name is the subject.
Brad DeLong explains in Seeking Alpha that the gist of the plan is to make the US Treasury the world's biggest hedge fund investor.
As the plan unfolds we might have plenty of opportunity to discover what kind of institution might deserve the name "a Geithner Bank"!
When I first read that, I saw the word "banks" as a noun, and Geithner as an adjective. I tried to makle sense out of that: what kind of bank is a Geithner bank, anyway?
It took me a few seconds to mentally transform "banks" into a verb and read the headline as a sentence in which the Treasury Secretary's name is the subject.
Brad DeLong explains in Seeking Alpha that the gist of the plan is to make the US Treasury the world's biggest hedge fund investor.
As the plan unfolds we might have plenty of opportunity to discover what kind of institution might deserve the name "a Geithner Bank"!
Tuesday, February 24, 2009
PL Capital and BARI
PL Capital Group is callenging the board of directors of Bancorp Rhode Island (Nasdaq: BARI), soliciting proxies from fellow shareholders for its own slate of three nominees to the board of directors.
One of those nominees, Daniel J. Mullane, said in a statement, "I believe I fully understand, and know how to meet, the challenges of growing a financial services organization in New England, including meeting the financial services needs of individuals and businesses, while enhancing the profitability andvalue of the business."
The principals of PL Capital (John Palmer and Richard Lashley) are taking the third swing at the ball. They've waged two proxy fights in the last couple of years trying to get seats on this board, to no avail.
Mullane seems to be a new convert to their cause.
In an SEC filing, Palmer and Lashley have explained their persistence this way: "The fact that we lost the proxy contest in the past two years does not invalidate our views. It just means that many shareholders (and ISS) gave BancorpRI the benefit of the doubt in the prior years’ elections. In hindsight, this appears to be a mistake, in our view, given the results."
That's the spirit!
One of those nominees, Daniel J. Mullane, said in a statement, "I believe I fully understand, and know how to meet, the challenges of growing a financial services organization in New England, including meeting the financial services needs of individuals and businesses, while enhancing the profitability andvalue of the business."
The principals of PL Capital (John Palmer and Richard Lashley) are taking the third swing at the ball. They've waged two proxy fights in the last couple of years trying to get seats on this board, to no avail.
Mullane seems to be a new convert to their cause.
In an SEC filing, Palmer and Lashley have explained their persistence this way: "The fact that we lost the proxy contest in the past two years does not invalidate our views. It just means that many shareholders (and ISS) gave BancorpRI the benefit of the doubt in the prior years’ elections. In hindsight, this appears to be a mistake, in our view, given the results."
That's the spirit!
Wednesday, April 2, 2008
Dividend policy
On principle, I'm a big fan of dividends.
The value of a stock should logically be the value of what a buyer thinks will be the stream of dividends it will generate into the indefinite future, discounted to present value.
Simple example: suppose I buy $100 of stock. I had other choices. I could have just put that money into an interest-bearing bank account. At (let us say) a 5% annual rate of interest. In that case, I might have received an income stream from this investment of $5 a year forever.
Why would I take money out of such an account to buy a share of stock unless I expected it to be at least as valuable as the same money was within the account? If there is no good reason, then presumably we're on firm ground in using that measure of value: the income stream I expect the stock to produce analogous to that safe $5 a year from the bank, IS its value.
That brings us back to the stream of dividends. Now, if a stock is increasing rapidly in value (some people will tell you) it isn't an "income stock" but a growth stock, and you as an investor shouldn't necessarily expect dividends.
This, to me, does not compute. If I own the stock only for its resale value, I'm betting that it will be worth a lot to the fellow after me. But what would it be worth to him, except its expected dividend stream? Somewhere we have to get a dividend stream, or else the value of a stock is just the arbitrary result of a "greater fool" theory.
If I was foolish enough last year to buy a pet rock, I can make it worthwhile if I find a greater fool than I, next year, and sell it to him for more. Growth stocks are either stalled income stocks (hoping to get to the dividend creation in the future) or they're pet rocks sold to ever greater fools.
Which is it?
The value of a stock should logically be the value of what a buyer thinks will be the stream of dividends it will generate into the indefinite future, discounted to present value.
Simple example: suppose I buy $100 of stock. I had other choices. I could have just put that money into an interest-bearing bank account. At (let us say) a 5% annual rate of interest. In that case, I might have received an income stream from this investment of $5 a year forever.
Why would I take money out of such an account to buy a share of stock unless I expected it to be at least as valuable as the same money was within the account? If there is no good reason, then presumably we're on firm ground in using that measure of value: the income stream I expect the stock to produce analogous to that safe $5 a year from the bank, IS its value.
That brings us back to the stream of dividends. Now, if a stock is increasing rapidly in value (some people will tell you) it isn't an "income stock" but a growth stock, and you as an investor shouldn't necessarily expect dividends.
This, to me, does not compute. If I own the stock only for its resale value, I'm betting that it will be worth a lot to the fellow after me. But what would it be worth to him, except its expected dividend stream? Somewhere we have to get a dividend stream, or else the value of a stock is just the arbitrary result of a "greater fool" theory.
If I was foolish enough last year to buy a pet rock, I can make it worthwhile if I find a greater fool than I, next year, and sell it to him for more. Growth stocks are either stalled income stocks (hoping to get to the dividend creation in the future) or they're pet rocks sold to ever greater fools.
Which is it?
Subscribe to:
Posts (Atom)
